We foreshadowed it and now it’s happening.  The NSW Government announced the first part of their plan to address the housing shortage in December 2023 and it looks like they’re really leaning in.

Local Government Councils are the direct target, with the State Government gearing up to steamroll Councils standing in the way of increased supply.

If your property is in other States or Territories, you should watch how the NSW changes roll out because we know for sure all State Governments are working on their planning changes.

And let’s face it . . they all have to step up supply.  Quickly.  While planning changes are just the first pillar, other avenues to get production going are well underway.

What does this mean for you?

There will be massive winners and losers with these changes.  More than ever before, it will be critical to have a detailed understanding of planning and zoning changes to ensure any future purchases are strategic, and to ensure any properties you own are optimised to their best and highest use.

It’s times like these when fortunes can be made and lost, so ensure you pay very close attention to the unfolding changes coming your way.  Of course, we’ve got you covered on this aspect, so check in with us before you make any decisions about your next purchase, current portfolio or home.

Book here if you want to check in with a Property Clarity Call.

See below for the full NSW announcement.

New planning rules to fast track low-rise and mid-rise housing

The Minns government is confronting the housing crisis with bold reforms to create tens of thousands of new, well-located, low-rise and mid-rise homes.

The government is announcing changes that will fast-track a greater diversity of homes like residential flat buildings of 3 to 6 storeys, terraces, townhouses, duplexes and smaller 1-storey to 2-storey apartment blocks in suburbs where they are not currently allowed.

The reforms create capacity for industry to deliver up to an estimated 112,000 new homes across the Greater Sydney region, Hunter, Central Coast and Illawarra.

This represents 30% of the number of homes NSW needs to meet under its Housing Accord target of 377,000 new homes by 2029.

Currently, each local council has its own rules for what kind of homes can be built in their area. In many local government areas, these rules do not allow the types of homes that we need for the next generation, housing close to transport, infrastructure and social amenity.

In October the government identified a significant gap in the approval of density, with terraces and 1-storey to 2-storey unit blocks allowed under R2 zoning in only 2 of 32 Local Environmental Plans (LEPs) – that’s just 6% of the LEPs across Sydney.

R2 is a zone for land which is made up of low-density housing.

This ‘missing middle’ has meant that low-rise density has been ignored in the face of a growing housing crisis.

Additionally, 60% of R3 zones across Sydney (where multi-dwelling housing is appropriate and should be encouraged) presently prohibit residential flat buildings of any scale.

Details of the proposed changes include allowing:

  • dual occupancies (2 separate homes on a single lot), such as duplexes, in all R2 low-density residential zones across all of NSW.
  • terraces, townhouses and 2-storey apartment blocks near transport hubs and town centres in R2 low-density residential zones across the Greater Sydney region, Hunter, Central Coast and Illawarra (the Six Cities region).
  • mid-rise apartment blocks near transport hubs and town centres in R3 medium-density zones and appropriate employment zones. This will mean more housing just a short 10-minute walk (800m) from transport hubs, shops and amenities.

The government will amend a State Environmental Planning Policy (SEPP) to enact these changes while simultaneously encouraging councils to add these types of dwellings to their own planning rules.

If a local government’s planning rules match – or go further than – this new NSW Government policy, the state government changes will not apply.

The government has previously written to councils, asking them to review local policy settings to allow for more housing in low-density and medium-density zones across their local government area.

National Housing Accord targets were set at the National Cabinet with all 3 levels of government represented.

The plans will go on public exhibition for public feedback from next week.

Minister for Planning and Public Spaces Paul Scully said:

“Sydney is one of the least dense cities in the world but fewer than half of councils allow for low-rise and mid-rise residential buildings in areas zoned for such homes.

“We’re confronting a housing crisis so we need to change the way we plan for more housing, we can’t keep building out. We need to create capacity for more infill, with more diverse types of homes.

“Diversity of housing allows people to stay in their communities and neighbourhoods through different stages of their life, with family and friends able to live nearby. More housing choice means more options for everyone – renters, families, empty nesters.

“Density done well means townhouses, apartments and terraces clustered near shops, high streets and parks.

“We already have great examples of these types of homes. Sydney has grown using these housing types. Look at homes in Wollstonecraft, Waverton, Erskineville, parts of Wollongong or Newcastle. They’re great places to live. We just need more of them.”

About the author

Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline.  She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses.  She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics.  She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.

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Disclaimer – This information is of a general nature only and does not constitute professional advice.  We strongly recommend you seek your own professional advice in relation to your particular circumstances.